HomeMy WebLinkAboutOrdinance No. 2010-27 - -` (Title: An ordinance finding that CenterPoint Energy's rates are unreasonable and
ordering CenterPoint to reduce its existing rates within the City and reimburse the City for
reasonable costs incurred in this rate case and related ratemaking proceedings.)
ORDINANCE NO. 2010-27
AN ORDINANCE FINDING THAT THE EXISTING ELECTRIC
DISTRIBUTION RATES OF CENTERPOINT ENERGY HOUSTON
ELECTRIC LLC ("CENTERPOINT" OR "COMPANY") ARE
UNREASONABLE AND SHOULD BE REDUCED; ORDERING
CENTERPOINT TO REDUCE ITS EXISTING RATES WITHIN THE
CITY OF FRIENDSWOOD; ORDERING CENTERPOINT TO SUBMIT
TARIFFS CONSISTENT WITH THE RECOMMENDATION OF THE
GULF COAST COALITION OF CITIES' CONSULTANTS IN. PUBLIC
UTILITY COMMISSION OF TEXAS DOCKET NO. 38339; ORDERING
CENTERPOINT TO REIMBURSE THE CITY FOR ITS REASONABLE
COSTS INCURRED IN THIS RATE CASE AND ANY RELATED
RATEMAKING PROCEEDINGS OR APPEALS OF SAID
PROCEEDINGS; AUTHORIZING THE GULF COAST COALITION OF
CITIES TO ACT ON BEHALF OF CITY AND INTERVENE IN ANY
PROCEEDINGS BEFORE ADMINISTRATIVE OR JUDICIAL BODIES;
REQUIRING DELIVERY OF THIS ORDINANCE TO THE COMPANY
AND LEGAL COUNSEL.
WHEREAS, the City of Friendswood, Texas ("City") is a regulatory authority under the
Public Utility Regulatory,Act CTURA") and pursuant to PURA § 33.001, the City has exclusive
original jurisdiction over the electric rates, operations, and services provided within city limits;
and
WHEREAS, the City has the authority under PURA §§ 33.001 and 36.001, to determine
whether the existing rates of an electric utility are unreasonable or in any way in violation of any
provision of law; and
WHEREAS, on or about June 30, 2010, CenterPoint, pursuant to PURA §§ 33.001 and
36.001, filed with the City of Friendswood a Statement of Intent to change electric delivery rates
in all municipalities exercising original jurisdiction within its service area effective August 6,
2010; and
WHEREAS, the City previously authorized participation with the Gulf Coast Coalition
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of Cities ("GCCC") in hiring experts and legal counsel to review CenterPoint's Statement of
Intent; and
WHEREAS, on July 12, 2010, the City adopted Resolution No. R2010-28 and
suspended the effective date of the Company's requested rate change; and
WHEREAS, GCCC's representatives obtained additional information from the
Company through written requests for information; and
WHEREAS, the City's consultants and representatives through cooperative efforts under
the direction of GCCC have reviewed the rate filing package and responses to information
requests and have made a recommendation to the City regarding the rates to be charged by the
Company within the City; and
WHEREAS, on October 4, 2010, a public hearing was held, at which time the Company
was given an opportunity to address the City Council regarding its current rates and it's,
Statement of Intent to increase rates; and
WHEREAS, PURA § 36.151(a) provides that if a regulatory authority, on its own
motion or on complaint by an affected person, after reasonable notice and hearing, finds that the
existing rates of an electric utility for a service are unreasonable or in violation of law, the l
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regulatory authority shall enter an order establishing the just and reasonable rates to be observed,
thereafter, and serve a copy of the order on the electric utility; and
WHEREAS, PURA § 36.151(b) provides that the rates thus ordered by the regulatory
authority constitute the legal rates of the electric utility until changed as provided by PURA; and
WHEREAS, after affording reasonable notice and hearing to the Company, it is the
City's opinion that the Company's current rates are not reasonable; and
WHEREAS,based upon such hearing, the briefing of staff, and the consultants' findings,
the City has made a determination of the reasonableness of the existing rates of the Company,
Ord 2010-27 2
and has determined just and reasonable rates to be hereafter observed and enforced for all
services of the Company within the City.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FRIENDSWOOD,STATE OF TEXAS:
Section 1. That the Company was given reasonable notice of the hearing held on
October 4, 2010, and the Company had a reasonable opportunity to show to the City that its rates
were just and reasonable.
Section 2. That the Company failed to show that it's proposed or existing rates are
just or reasonable.
Section 3. That the adjustments to the Company's Statement of Intent proposed by Mr.
Lane Kollen on behalf of GCCC in Public Utility Commission of Texas ("PUC") Docket No.
38339 and provided to the Company on September 10, 2010 are reasonable and that it is,
therefore, reasonable to reduce existing annual revenues by$149 million.
Section 4. That within ten days of the adoption of this Ordinance, CenterPoint shall file.
with the City rate tariffs consistent with the adjustments proposed by Mr. Kollen and the cost!
allocation and rate design recommendations proposed by Mr. Clarence Johnson on behalf ofI
GCCC in PUC Docket No. 38339 and provided to the Company on September 10, 2010 that will
result in a reduction in current annual revenue of$149 million.
Such Tariffs shall constitute just and reasonable rates and establish the Company's
overall revenues at an amount that will permit the Company a reasonable opportunity to earn a�
reasonable return on its invested capital used and useful in providing service to the public in
excess of the Company's reasonable and necessary operating expenses, in compliance with
PURA § 36.151.
Section 5. That the Company shall immediately begin charging the rates set forth in
Tariffs that are consistent with the recommendations of GCCC witnesses Kollen and Johnson in
PUC Docket No. 38339.
Section 6. That the existing rates, service charges, and tariff language not
inconsistent with the recommendations of GCCC witnesses Kollen and Johnson in PUC Docket
No. 38339 shall remain operative.
Ord 2010-27 3
Section 7. That the City is authorized to intervene in any appeal of the City's
action filed at the PUC and to otherwise participate in any litigation associated with the
Company's rates charged in the City, in conjunction with GCCC.
Section 8. That within ten days of the adoption of this Ordinance, the Company
shall reimburse GCCC for all ratemaking costs associated with GCCC's activities related to the
rate proceeding and thereafter make prompt reimbursement on a monthly basis to cover the costs
of appeals to the PUC or Courts, in accordance with PURA § 33.023. Under no circumstances
shall the City of Friendswood be responsible to Lloyd Gosselink Rochelle and Townsend, P.C.,
or consultants hired by Lloyd Gosselink Rochelle and Townsend, P.C., for any rate case
expenses resulting from this case (Statement of Intent to change electric delivery rates).
Section 9. That a copy of this Ordinance shall be sent to the Company, care of
Stephen Bezecny, Director, Regulatory Relations, CenterPoint Energy, Inc., I I I I Louisiana St.,
Houston, Texas, 77002 and to Thomas Brocato, at Lloyd Gosselink Rochelle & Townsend, P.C.,
816 Congress Avenue, Suite 1900, Austin, Texas 78701.
Section 10. That this Ordinance shall become effective immediately from and after
its passage, as the law and charter in such cases provide.
Section 11. That it is hereby officially found and determined that the meeting at
which this Ordinance is passed is open to the public as required by law and that public notice of
the time,place and purpose of said meeting was given as required.
PASSED AND APPROVED on first reading this 4th day of October, 2010.
PASSED, APPROVED, AND ADOPTED on second and final reading this the 18th
day of October,2010.
David J.H. Smith
Mayor
ATTEST: OF FRielyaS
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Melinda Welsh, TRMC Cal
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City Secretary
qrE OF S�$
Ord 2010-27 4